Correlation Between Dodge Cox and Fixed Income
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Fixed Income at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dodge Cox and Fixed Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge Cox Stock and Fixed Income Shares, you can compare the effects of market volatilities on Dodge Cox and Fixed Income and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dodge Cox with a short position of Fixed Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Fixed Income.
Diversification Opportunities for Dodge Cox and Fixed Income
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dodge and Fixed is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox Stock and Fixed Income Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fixed Income Shares and Dodge Cox is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dodge Cox Stock are associated (or correlated) with Fixed Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fixed Income Shares has no effect on the direction of Dodge Cox i.e., Dodge Cox and Fixed Income go up and down completely randomly.
Pair Corralation between Dodge Cox and Fixed Income
Assuming the 90 days horizon Dodge Cox Stock is expected to under-perform the Fixed Income. In addition to that, Dodge Cox is 1.53 times more volatile than Fixed Income Shares. It trades about -0.17 of its total potential returns per unit of risk. Fixed Income Shares is currently generating about 0.25 per unit of volatility. If you would invest 893.00 in Fixed Income Shares on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Fixed Income Shares or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge Cox Stock vs. Fixed Income Shares
Performance |
| Timeline |
| Dodge Cox Stock |
| Fixed Income Shares |
Dodge Cox and Fixed Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Fixed Income
The main advantage of trading using opposite Dodge Cox and Fixed Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Fixed Income can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fixed Income will offset losses from the drop in Fixed Income's long position.| Dodge Cox vs. Morningstar Unconstrained Allocation | Dodge Cox vs. Aqr Large Cap | Dodge Cox vs. Fisher Large Cap |
| Fixed Income vs. Ishares Municipal Bond | Fixed Income vs. Franklin High Yield | Fixed Income vs. Touchstone Premium Yield | Fixed Income vs. Pace High Yield |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |